The 39-year-old forward, who won the World Cup with Italy in 2006, confirmed the move on Thursday via his Twitter account, adding that he will also be an ambassador for the new league.
The inaugural ISL season runs from October to December, freeing Del Piero up for a possible move to the United States, where the Major League Soccer season starts in January.
''I am very enthusiastic about this new adventure, it fits perfectly well with the way in which I chose to move forward since I left Juventus, three summers ago,'' Del Piero said in a statement. ''I've never wanted to repeat the paths I've already walked, I have never looked for emotions that I've already experienced, those are unique and will remain unique and special forever.''
''For me, the pitch isn't the only thing that counts, that what surrounds the game counts just as much. Above all what is important is the possibility to join together the professional aspect and the role of ''football ambassador'', a chance to proudly represent in the world this wonderful sport, that has become a fundamental part of my life since the day I was born.''
Del Piero scored 24 goals in two seasons at Sydney FC, and was the club's top goalscorer in both campaigns.
He spent 19 seasons at Juventus, 11 as captain, during which he scored 290 goals.